Frontier CEO is 'optimistic' about tourism industry despite economic uncertainty
Despite a downturn in foreign tourism and broader economic uncertainty, Frontier CEO Barry Biffle remains optimistic about the budget airline's future.
'People think that there's some kind of Armageddon going to happen,' Biffle said in an exclusive interview with 'NBC Nightly News' correspondent Hallie Jackson that airs on Sunday. 'I think that as we look here today, I'm optimistic.'
Travel experts have been sounding the alarm amid President Donald Trump's global trade war, warning that a year that was initially projected to be profitable for the tourism industry could instead face an economic downturn.
Before Trump announced a 90 - day pause on most of his proposed tariffs, Delta CEO Ed Bastian told CNBC last week that air travel has all but stalled for both leisure and business travel.
'I think everyone's prepared for uncertainty,' Bastian said. 'If that continues, and we don't get resolution soon, we probably will end up in a recession.'
Biffle acknowledged the bleak outlook shared by those in the airline industry.
'What's become clear is, obviously, there's been some challenges with travel demand, and we've seen it in all industries now. Hotels, airlines, cruise lines are seeing less bookings,' he said.
However, Biffle believes that Frontier's ultra-low-cost model positions it to thrive, especially as consumers become more price-conscious. He likens Frontier's appeal to that of retailers like Walmart, suggesting that when the economy is down, value-oriented businesses tend to perform better.
'What's happened is there's going to be a massive reversal of fortune,' he said. 'Over the last several years, the legacy carriers have done very, very well at the expense of us, but there's now too much domestic supply.'
'In any type of recessionary or kind of economic challenge environment — the 'Walmart effect,' you know — businesses like ours do well,' he added.
Amid economic uncertainty and stricter immigration policies, overseas travelers are increasingly canceling trips to the U.S. According to the National Travel and Tourism Office, international travel to the U.S. was down 12% in March compared to a year ago.
'Right now, we're seeing boycott travel to the United States out of Europe,' Biffle said. 'So can you imagine maybe not 70% — if it's just down 20%, that's a massive market. This is a huge challenge.'
Biffle predicted that the hottest travel spots for Americans this summer will be domestic locations.
'Domestic is en vogue again because of a lot of things going on in the marketplace,' he said. 'And so I think you're going to see a lot of people travel all over the United States this summer.'
To adapt to current market conditions, Frontier is implementing strategic changes. The airline has revamped its pricing strategy by introducing bundled fare options, including offerings with extra legroom and empty middle seats. Frontier also plans to attract more domestic travelers by offering first-class seats later this year. Additionally, Biffle touted the airline's plans to eliminate bag fees this summer.
The bag fee move appeared to be aimed at Frontier competitor Southwest Airlines, which announced last month that it would begin charging for checked bags. The decision sparked outrage among consumers.
Biffle also raised worries about a shortage of U.S. air traffic controllers, a concern shared by aviation safety experts particularly following the fatal midair collision between an American Airlines passenger jet and an Army helicopter in January.
'On a normal day with no weather, it's generally not that big of a challenge,' Biffle said. 'However, I'll take Florida as an example — Christmas, New Year's, Presidents Day, spring break, weekends, if you mix any kind of weather with that, we have cancelations across the industry, and the reason for it is we exceed the capabilities of all of the air traffic controllers there.'
But Biffle said he is confident the Trump administration is working to reduce the shortage, and he maintained that air travel is 'the safest way to travel, and I think that we're getting safer.'
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